Senate Bill No. 390

(By Senator Oliverio and McKenzie)

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[Introduced February 3, 2000; referred to the Committee on Transportation; and then to the Committee on Finance.]
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A BILL to amend and reenact sections two, four, seven, eight, nine, ten and twelve, article nine, chapter twenty-one of the code of West Virginia, one thousand nine hundred thirty-one, as amended, all relating to the powers and duties of the West Virginia manufactured housing construction and safety standards board and its authority to levy civil penalties; defining the term "transporter"; adding transporters to the list of persons the board oversees; requiring an annual license fee of two hundred dollars from transporters; and providing a criminal penalty for transporters operating in the state without a license.

Be it enacted by the Legislature of West Virginia:
That sections two, four, seven, eight, nine, ten and twelve, article nine, chapter twenty-one of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 9. MANUFACTURED HOUSING CONSTRUCTION AND SAFETY STANDARDS.

§21-9-2. Definitions.
(a) "Board" means the West Virginia manufactured housing construction and safety board created in this article.
(b) "Commissioner" means the commissioner of the West Virginia state department of labor.
(c) "Contractor" means any person who performs operations in this state at the occupancy site which render a manufactured home fit for habitation. This definition does not include persons who do work on a manufactured home which is owned or leased by such person doing the work. Such These operations include, without limitation, installation or construction of the foundation, positioning, blocking, leveling, supporting, tying down, connecting utility systems, making minor adjustments or assembling multiple or expandable units. Such These operations also include transporting the unit to the occupancy site by other than a motor carrier regulated by the West Virginia public service commission.
(d) "Dealer" means any person engaged in this state in the sale, leasing or distribution of new or used manufactured homes, primarily to persons who in good faith purchase or lease a manufactured home for purposes other than resale.
(e) "Defect" includes any defect in the performance, construction, components or material of a manufactured home that renders the home or any part thereof not fit for the ordinary use for which it was intended.
(f) "Distributor" means any person engaged in this state in the sale and distribution of manufactured homes for resale.
(g) "Federal standards" means the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. §5401, et seq.), and federal manufactured home construction and safety standards and regulations promulgated by the secretary of HUD to implement such that act.
(h) "HUD" means the United States department of housing and urban development.
(i) "Manufacturer" means any person engaged in manufacturing or assembling manufactured homes, including any person engaged in importing manufactured homes for resale.
(j) "Manufactured home" means a structure, transportable in one or more sections, which in the traveling mode is eight body feet or more in width or forty body feet or more in length or, when erected on site, is three hundred twenty or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning and electrical systems contained therein; except that such this term shall include includes any structure which meets all the requirements of this definition except the size requirements and with respect to which the manufacturer voluntarily files a certificate which complies with the applicable federal standards. Calculations used to determine the number of square feet in a structure will be based on the structure's exterior dimensions measured at the largest horizontal projections when erected on site.
(k) "Purchaser" means the first person purchasing a manufactured home in good faith for purposes other than resale.
(l) "Transporter" means any person, firm or corporation who, for compensation, transports a manufactured home upon any public road in this state to an occupancy site.
§21-9-4. General powers and duties; persons adversely affected entitled to hearing.

(a) The board shall have has the power to:
(1) Regulate its own procedure and practice;
(2) Promulgate reasonable Propose for legislative approval rules to implement any provision of this article or of the federal standards, such rules to be promulgated in accordance with the provisions of article three, chapter twenty-nine-a of this code;
(3) Advise the commissioner in all matters within his or her jurisdiction under this article;
(4) Prepare and submit to HUD a state plan application seeking the designation of the board as a state administrative agency for the purpose of administering and enforcing the federal standards and take all other action necessary to enable the board to serve as such a state administrative agency;
(5) Study and report to the governor and the Legislature on matters pertinent to the manufacture, distribution and sale of manufactured housing in this state and recommend such changes in the law as the board may determine to be necessary to promote consumer safety and protect purchasers of manufactured housing;
(6) Conduct hearings and presentations of views consistent with its rules and regulations and the federal standards;
(7) Approve or disapprove applications for licenses to manufacturers, dealers, distributors, and contractors, and transporters in accordance with section nine of this article, and revoke or suspend such licenses in accordance with such that section, and set the amounts of license fees and bonds or other forms of assurance in accordance with sections nine and ten of this article;
(8) Realizing the inability of the citizens of the state of West Virginia to obtain fire insurance on manufactured housing, the Legislature directs the board to conduct a study in regard to this crisis and to report to the Legislature by the fifth day of February, one thousand nine hundred eighty-nine. The report shall include specific recommendations to correct this crisis and improve the availability and reduce the cost of fire insurance;
(9) Delegate to and authorize the commissioner to exercise such powers and duties of the board as the board may from time to time determine, including, without limitation, the authority to approve, disapprove, revoke or suspend licenses in accordance with section nine of this article.
(b) Any person adversely affected by a decision of the board or the commissioner shall be afforded an opportunity for hearing before the board in accordance with section one, article five, chapter twenty-nine-a of this code.
§21-9-7. Monitoring inspection fee.

The board shall establish a monitoring inspection fee in an amount established by HUD. Such The fee shall be paid by the manufacturer for each manufactured home produced in this state to the secretary of HUD, who shall distribute the fees collected from all manufactured home manufacturers among the approved and conditionally approved states based on the number of new manufactured homes whose first location after leaving the manufacturing plant is on the premises of a distributor, dealer, transporter or purchaser in that state.
§21-9-8. Maintenance and production of records and other information.

Each manufacturer, dealer, distributor, and contractor and transporter shall establish and maintain such records, make such reports and provide such information as the board or the secretary of HUD may reasonably require in order to be able to determine whether such the manufacturer, dealer, distributor, or contractor, or transporter has acted or is acting in compliance with this article, the rules and regulations promulgated by the board pursuant to this article or the federal standards and shall, upon request of a person duly designated by the board or the secretary of HUD, permit such that person to inspect appropriate books, papers, records and documents relevant to determining whether such the manufacturer, dealer, distributor, or contractor or transporter has acted or is acting in compliance with this article and the federal standards.
§21-9-9. License required; fees; form of license; display of license; denial, suspension or revocation.

(a) No manufacturer, dealer, distributor, or contractor or transporter shall may engage in business in this state without first having applied for and received a license pursuant to this section. The license shall authorize the holder to engage in the business permitted by the license. All license applications shall be accompanied by the required fee and surety bond or other form of assurance as required by subsection (c) of section ten of this article or as required by rule or regulation promulgated by the board.
(b) All licenses shall be granted or refused within thirty days after proper and complete application. All licenses shall expire on the thirtieth day of June of each year, unless sooner revoked or suspended. Applications shall be deemed are valid for a period of thirty days.
(c) The annual license fees shall be in the amounts prescribed from time to time by rules and regulations promulgated by the board but in no event less than the following amounts:
(1) For manufacturers, three hundred dollars;
(2) For dealers, one hundred dollars;
(3) For distributors, one hundred dollars; and
(4) For contractors, fifty dollars: Provided, That if a contractor has met the licensing requirements of this article and the West Virginia contractor licensing act in article eleven of this chapter, has paid the annual license fee under section eight, article eleven of this chapter and has furnished bond or other assurance under section ten of this article, he or she shall may not be required to pay the annual license fee set forth in this section; and
(5) For transporters, two hundred dollars.
(d) The board shall prescribe the form of license and each license shall have affixed thereon the seal of the state department of labor.
(e) Each licensee shall conspicuously display the license in its established place of business.
(f) Pursuant to such rules and regulations as may be promulgated by the board, the board may deny the issuance of a license or revoke or suspend any license.
(g) The proceeds of such these fees shall be deposited in a special account in the state treasury to be used by the department of labor for the administration of the provisions of this article.
§21-9-10. Licensee to furnish bond or other form of assurance.

(a) Each manufacturer, dealer, distributor or contractor which applies for a license under the preceding section shall, at the time of making application therefor, furnish a surety bond or such other form of assurance of the applicant's financial responsibility as the board may by rule or regulation permit, such the surety bond or other form of assurance to be in such amount as the board may by rule or regulation prescribe. In the event of forfeiture of any such bond or security, the proceeds thereof shall be deposited in the special account created under section nine of this article.
(b) The bond or other form of assurance shall cover any misappropriation of funds of a purchaser or prospective purchaser of a manufactured home, any deception or false or fraudulent representations or deceitful practices in selling or representing a product, any failure by a licensee, because of bankruptcy, insolvency or other reason, to fulfill warranty obligations and any failure of the licensee, its agents or employees, to comply with the federal standards, this article or any rules or regulations promulgated by the board pursuant to this article.
(c) Each transporter shall maintain a policy of insurance approved by the board and obtained from an insurer authorized to conduct business in this state in an amount of not less than one hundred thousand dollars for each manufactured home transported and one million dollars in the aggregate. The policy shall insure the transporter against liability for damages to a manufactured home in the transit process. The board may not accept any policy of insurance unless it obligates the insurer to give written notice to the board thirty days before any proposed cancellation, suspension or nonrenewal of the policy. The board shall make available upon request an approved endorsement form.
§21-9-12. Civil penalties; criminal penalties.
(a) Any person who violates any of the following provisions relating to manufactured homes or any rule promulgated by the board pursuant to the provisions of this article is liable to the state for a penalty, as determined by the court, not to exceed one thousand dollars for each violation. Each violation constitutes a separate violation with respect to each manufactured home, except that the maximum penalty may not exceed one million dollars for any related series of violations occurring within one year from the date of the first violation. No person may:
(1) Manufacture for sale, lease, sell, offer for sale or lease, or introduce or deliver, or import into this state any manufactured home which is manufactured on or after the effective date of any applicable standard established by a rule promulgated by the board pursuant to the provisions of this article, or any applicable federal standard, which does not comply with that standard.
(2) Fail or refuse to permit access to or copying of records, or fail to make reports or provide information or fail or refuse to permit entry or inspection as required by the provisions of this article.
(3) Fail to furnish notification of any defect as required by the provisions of 42 U.S.C. §5414.
(4) Fail to issue a certification required by the provisions of 42 U.S.C. §5415 or issue a certification to the effect that a manufactured home conforms to all applicable federal standards, when the person knows or in the exercise of due care would have reason to know that the certification is false or misleading in a material respect.
(5) Fail to establish and maintain records, make reports, and provide information as the board may reasonably require to enable the board to determine whether there is compliance with the federal standards; or fail to permit, upon request of a person duly authorized by the board, the inspection of appropriate books, papers, records and documents relative to determining whether a manufacturer, dealer, distributor or contractor has acted or is acting in compliance with the provisions of this article or applicable federal standards.
(6) Issue a certification pursuant to the provisions of 42 U.S.C. §5403(a), when the person knows or in the exercise of due care would have reason to know that the certification is false or misleading in a material respect.
(b) Subdivision (1), subsection (a) of this section does not apply to: (i) The sale or the offer for sale of any manufactured home after the first purchase of it in good faith for purposes other than resale; (ii) any person who establishes that he or she did not have reason to know in the exercise of due care that such the manufactured home is not in conformity with applicable federal standards; or (iii) any person who, prior to the first purchase, holds a certificate by the manufacturer or importer of the manufactured home to the effect that such the manufactured home conforms to all applicable federal standards, unless that person knows that the manufactured home does not conform to those standards.
(c) Any manufacturer, dealer, distributor, or contractor or transporter who engages in business in this state without a current license as required by the provisions of this article or without furnishing a bond or other form of assurance as required by the provisions of this article is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than fifty dollars for each day the violation continues.
(d) Any person or officer, director, partner or agent of a corporation, partnership or other entity who willfully or knowingly violates any of the provisions listed in subsection (a) of this section, in any manner which threatens the health or safety of any purchaser, is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than one thousand dollars or confined in the county or regional jail for a period of not more than one year, or both fined and imprisoned: Provided, That nothing in this article may apply to any bank or financial institution engaged in the disposal of foreclosed or repossessed manufactured home(s).




NOTE: The purpose of this bill is to include within the powers and duties of the West Virginia manufactured housing construction and safety standards board authority over "transporters." The bill also defines the term "transporter," adds transporters to the list of persons over who the board oversees, requires an annual license fee of two hundred dollars be paid by transporters, and provides a criminal penalty for transporters operating in the state without a license.


Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.